China, once a major lender under its Belt and Road Initiative, is now the world's largest debt collector for developing nations. A Lowy Institute report reveals that over a quarter of developing countries' external debt is owed to China, with at least $35 billion in repayments expected this year. This shift, driven by China's reduced lending and the maturation of existing loans, is straining the budgets of many countries, hindering development spending and potentially fueling instability. While some countries benefit from continued Chinese investment, others, particularly in Africa, are experiencing severe economic consequences, impacting domestic politics and international relations. The report highlights the contrast between China's loan-based aid and the grant-based aid from the US, exacerbating the debt burden.

Prepared by Christopher Adams and reviewed by editorial team.